In 2026, the government is considering implementing a new regulatory levy on ultra-processed foods (UPFs) to curb rising rates of metabolic illness. Behavioural economists suggest that standard fiscal measures alone may not be sufficient to curb consumption significantly. By 2045, chronic conditions linked to poor diet are projected to affect 65% of adult men, 55% of adult women, and 30% of adolescents, placing severe strain on public healthcare systems. Consuming UPFs is closely linked to cardiovascular illness, type 2 diabetes, and systemic inflammation.
Explain why, in a free market, ultra-processed foods (UPFs) may be overconsumed.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.